Wall Street recovered Wednesday followed Federal Reserve Chairman Ben Bernanke's comments on stock markets and the U.S. economy.

Bernanke told Congress that the administration and federal regulators are closely monitoring financial markets in the wake of the biggest sell-off in stock prices in more than five years but so far the markets appear to be "working well."

Wall Street plunged more than 3 percent Tuesday as a heavy sell- off in China's stock markets pushed down the global equity dominos.

There did not appear to be a "single trigger" to Tuesday's big drop, said the chairman.

There had been no major change in the outlook for the economy, added Bernanke, reiterating that the Fed expects "moderate growth" this year.

Also on Wednesday the Commerce Department said the U.S. economy grew at 2.2 percent in the final quarter of last year, much slower than initially estimated. Consumer spending was also lower than originally reported.

New-home sales plunged by 16.6 percent in January from the previous month, according to the Commerce Department.

The Dow Jones industrial average rose 52.07 points, or 0.43 percent, to 12,268.31. The Nasdaq composite index gained 8.27 points, or 0.34 percent, to 2,416.13 while the Standard & Poor's 500 index was up 7.77 points, or 0.56 percent to 1,406.81.